Intel and Qualcomm hit as US halts chip exports to China amid security concerns

Intel, announced on Wednesday that it expects a decline in sales following the US government's decision to revoke some of its export licenses for a Chinese customer.

This move, intended for national security reasons, has sparked objections from Beijing, highlighting escalating tensions between the two economic powerhouses.

While Intel did not disclose the identity of the affected Chinese customer, recent reports suggest that the US has revoked licenses allowing companies like Intel and Qualcomm to supply chips to sanctioned Chinese telecom giant Huawei Technologies.

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The revocation of export licenses has implications for Intel and Qualcomm, impacting their ability to supply chips for laptops and handsets to Huawei.

The development follows the release of Huawei's AI-enabled laptop, the MateBook X Pro, powered by Intel's latest Core Ultra 9 processor.

This launch drew criticism from US lawmakers, who expressed concerns over national security risks associated with supplying advanced technology to Huawei.

As a result, Intel's shares experienced a 2.9 per cent decline, reflecting investor apprehension over the company's revenue prospects.

Qualcomm, another key player in the semiconductor industry, also revealed that one of its export licenses for Huawei had been revoked.

While Qualcomm's shares remained relatively stable, the implications of this regulatory move are likely to resonate across the tech sector.

Commerce Secretary Gina Raimondo said that the action against Huawei is not a deviation from existing policy but rather a response to evolving security concerns, particularly regarding AI capabilities embedded in semiconductor technologies.

Raimondo highlighted the importance of reassessing licensing decisions in light of advancing AI capabilities.

Responding to the US government's actions, the Chinese foreign ministry issued a statement condemning the move, claiming that the US was unjustifiably using export controls to suppress Chinese companies under the guise of national security.

This latest escalation adds to the ongoing trade tensions between the two economic giants, reflecting bigger geopolitical competition in the realm of technology.

The US government's placement of Huawei on a trade restriction list in 2019 signalled an effort to curb China's technological advancement, particularly in sensitive sectors with military implications.

President Joe Biden's administration has adopted a multifaceted approach to constrain China's access to cutting-edge technology, employing export bans and diplomatic initiatives to counter China's technological rise.

This latest move against Huawei accentuates Biden's plan to China's access to advanced US technology, framing it within the context of strategic competition between the two nations.

(With inputs from Reuters)